Chancellor Rachel Reeves shared her Spring Statement to parliament today and as expected it was full of spending cuts – here is a full list of those who can be considered winners and the losers
Rachel Reeves delivered her long-awaited Spring Statement today, announcing major cuts to public spending. The Spring Statement is not a formal budget – as Labour pledged to only deliver one per year – but instead update on the economy.
The Chancellor confirmed that there would be no major tax changes today, however, there were still huge updates that are set to affect millions across the country. Reeves told the Commons “the world has changed” since her first Budget just under five months ago, and that was to blame for the raft of spending cuts she announced today. Here, we highlight some of the winners and losers of the Spring Statement.
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Losers
Universal Credit claimants
Last week, Work and Pensions Secretary Liz Kendall announced major reforms to Universal Credit as part of plans to push more disabled people into work. Further cuts to the benefit were confirmed today, with an extra £500million set to be slashed.
Today, it was confirmed that Universal credit incapacity benefits for new claimants will be frozen until 2030 rather than increased in line with inflation. This means that the £416.19 a month incapacity amount for those who have limited capability for work and work-related activity will remain at the same level going forward.
The basic rate of Universal Credit will also be reduced slightly in 2029 after the Work and Pensions secretary increased it by £7 a week. The Chancellor has not confirmed the level of reduction. The government has confirmed that it will bring forward primary legislation this session to enable the delivery of the Universal Credit rebalancing reforms from April 2026.
People with health conditions and disabilities
The PIP changes from last week were doubled down on by the Chancellor today. Even though ministers, charities and campaigners have warned that the changes to the disability benefit could cause serious harm to disabled people in the UK. According to the government’s own impact assessment report, restricting the eligibility for PIP will see 370,000 people will lose support with an average loss of £ 4,500 per year.
Carers
According to the DWP, the new tighter PIP rules could potentially see over 150,000 people lose their Carer’s Allowance benefit. This benefit pays £81.90 per week benefit paid to people who do a lot of unpaid care. PIP is one of the benefits used to determine whether the person providing the care can get Carer’s Allowance.
The DWP said: “By 2029/30 an estimated 800,000 people will not receive the daily living component of Pip who would have under current rules, a significant proportion of these people will retain access to the obility component and will remain on the benefit. A further 150,000 people will not receive carer’s allowance or the UC [universal credit] carer element as a result.”
Civil servants
On departmental budgets – which dictate how much different parts of government can spend until 2030 – Reeves said she aimed to make the state “leaner and more agile”. She said this will come from making the civil service and government bodies are more productive – and builds on the announcement to abolish the arm’s-length body NHS England.
The Chancellor said Cabinet Office minister Pat McFadden would “significantly reduce the costs” of government by 15% – worth £2billion by the end of the decade.” Cuts to certain department spending likely means cuts to civil service jobs. There is still no formal target for the number of civil servants who will be cut, but Reeves has previously said 10,000 jobs are at risk.
Tax fraudsters
The Chancellor announced today that the government would be cracking down even harder on tax evasion. The Treasury set out plans today that aim to “increase the number of tax fraudsters charged each year by 20%”. This would increase the number of charging decisions from 500 to 600 a year. Reeves said the government would continue investing in “cutting-edge technology” for HMRC to be able to do this. The move is set to raise the total revenue raised from reducing tax evasion to £ 7.5billion.
Homeowners
The OBR has warned the treasury that inflation is now forecast to peak at 3.8% in July 2025, higher than previous expectations. This warning comes despite inflation having eased to 2.8% in the 12 months to February, with it unlikely to return to the Bank of England’s 2% target until the following year.
Such forecasts could prompt the Bank of England’s Monetary Policy Committee (MPC) to hold off on further interest rate cuts this year. Meaning mortgage rates could continue to remain high.
Self-assessment taxpayers
More taxpayers will face harsher late payment charges under new rules announced alongside Chancellor Rachel Reeves’ Spring Statement. The Treasury published plans to increase late payment penalties for VAT and income tax self-assessment taxpayers as they join the “Making Tax Digital” scheme from April 2025.
The digital scheme requires individuals and businesses to keep digital records and submit updates every four months – or “quarter”. VAT and self-assessment taxpayers face charges from HMRC if they file late, which includes a first penalty and then an additional penalty, with an annualised penalty rate.
Currently, a taxpayer will not get a penalty if the outstanding tax is paid within the first 15 days after the due date. After this, they are charged 2% of the tax due. If the tax is still unpaid after 30 days, taxpayers will face another 2%, meaning a total 4% charge by day 30. From April 2025, taxpayers who are part of the MTD scheme will be charged 3% of the outstanding tax where their tax is overdue by 15 days, plus another 3% if it is still unpaid at 30 days.
They will also face a doubling of the annualised rate, from 4 per cent currently to 10 per cent. The government said it was increasing the charges “to encourage taxpayers to pay on time”.
Winners
Low-income parents
Rachel Reeves confirmed today that the government would not be axing free school meals for young children. Currently, all children in reception, year one and year two are entitled to free school meals. She also noted that Labour’s new breakfast clubs were currently being rolled out across England.
Savers
Rumours have swirled for weeks around whether the Chancellor would cut the tax-free allowance from £20,000 to £4,000. It was believed that this move would encourage more people to invest their savings in stocks and shares. However, this did not happen.
The government did say in its Spring Statement documents that it was looking at options for reforms to Individual Savings Accounts “that get the balance right between cash and equities to earn better returns for savers, boost the culture of retail investment, and support the growth mission.” Alongside this, the government is working closely with the Financial Conduct Authority (FCA) to deliver a system of “targeted support to give people the confidence to invest.”
Homebuyers
The chancellor promised thousands of new social and affordable homes will be built with a £2billion grant. The Chancellor confirmed that 18,000 new homes would be built, describing it as the “biggest boost to social and affordable housebuilding in a generation”.
However, she accepted that Labour is likely to miss its manifesto pledge to build 1.5 million homes by the next general election. Reeves said the government will oversee 1.3 million new homes being built in the next five years, “within touching distance” of the election pledge. The OBR said the boost means there will be 305,000 homes a year by the end of the decade.
Those looking to work in construction
In a bid to kickstart economic growth, the chancellor confirmed that the government would plough £600million into training up to 60,000 bricklayers, electricians, engineers and carpenters over the next four years. The move is designed to help fill 35,000 job vacancies in construction
Smokers and drinkers
In the documents published alongside the announcement, it was confirmed the price of alcohol and cigarettes will not be going up as there are no changes to the duties charged to them. Alcohol duty is a type of tax that manufacturers pay when making products. The tax varies in cost depending on the alcohol content of the drinks.
Tobacco duty is a tax charged to companies making or importing cigarettes in the UK. When these duties are raised, the cost is filtered down onto consumers. Follow our Spring Statement 2025 live blog for the latest updates and to see how all the changes affect your money. What do you think? Let us know by emailing webnews@mirror.co.uk
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